China Agrees to Indigenous Innovation, Gov't Procurement Revisions at JCCT

These include initiatives in indigenous innovation, government procurement, intellectual property rights enforcement, express delivery, open and neutral technology standards, agriculture, and clean energy. China also agreed to resume talks on beef market access.

(The JCCT was co-chaired by U.S. Secretary of Commerce Locke and U.S. Trade Representative Kirk along with Chinese Vice Premier Wang Qishan. U.S. Secretary of Agriculture Tom Vilsack also participated in the discussions.)

Indigenous Innovation Policies

IPR and Non-Discrimination

China and the U.S. will not adopt or maintain measures that make the location of the development or ownership of intellectual property a direct or indirect condition for eligibility for government procurement preferences for products and services. China and the U.S. will continue to discuss whether this principle applies to other government measures.

Ministry of Industry and Information Technology Equipment Catalogue

China will revise its major equipment catalogue in 2011 and publish a draft for public comment. The revised measure will not be used for import substitution or the provision of export subsidies, or otherwise to discriminate against foreign suppliers.

3G/Future Technologies

China agreed that it will take an open and transparent approach with respect to operators’ choices that does not provide preferential treatment based on the standard or technology used in 3G or successor networks and allows operators to choose freely among whatever existing or new technologies that may emerge to provide upgraded or advanced services. China also confirmed that regulation of spectrum would not be used as a basis to discriminate against any technology.

Government Procurement

Accession to the WTO Government Procurement Agreement

China agreed to submit a robust, second revised offer to the WTO Government Procurement Committee before the Committee's final meeting in 2011. Its content and specific timing will be based on relevant departments' consultations with individual sub-central entities and other entities regarding GPA coverage. (Under the GPA, “other entities” include state-owned enterprises.)

Government Procurement Preferences

The relevant Chinese departments are conducting further modifications to the Implementing Regulations on the Government Procurement Law and will seriously take into account opinions and suggestions from all sides, including from the U.S.. In government procurement, China will give equal treatment to all innovation products produced in China by foreign-invested enterprises and Chinese-invested enterprises alike. (The U.S. expressed concerns that under Article 9 of China’s draft Regulations, product lists could be used to provide government procurement preferences to indigenous innovation products.)

Government Procurement and Commercial Products

China and the U.S. recognize the importance of defining domestic products in a flexible manner. The Chinese departments concerned are conducting further modifications and improvements to the draft regulations, taking into consideration U.S. comments on how to maximize procuring entities' efficiencies and cost savings. The two sides will continue consultations and exchanges of information on the definition of domestic products.

Intellectual Property Rights

Software Legalization

• In reporting on the enhancement of its government software legalization program, China announced that it is establishing software asset management systems for government agencies and is incorporating software into China’s asset management system as property, in efforts to more effectively implement software legalization.
• China has allocated current and future budgets for purchasing, upgrading, and replacing agency software.
• China announced its intent to further promote the licensed use of software in enterprises, and announced the participation of 30 major Chinese state-owned enterprises in a government/enterprise partnership pilot project.
• The U.S. and China will further discuss, before the middle of January, the issue of verification of compliance with legalization requirements.

Internet Infringement Liability

Building on prior JCCT discussions on how to combat online copyright infringement, China announced that its judiciary is conducting a study on drafting relevant Judicial Interpretations on this issue. During this process, China’s judiciary will pursue the in-depth study of several issues including Internet Intermediary Liability. The U.S. and China have agreed to actively support this process in order to obtain the early completion of a Judicial Interpretation that will make clear that those who facilitate online infringement will be equally liable for such infringement.

Patents/Standards

China and the U.S. agreed that patent issues related to standards raise complex issues that require standard setting organizations to take into account the appropriate balance among the interests of patentees, standard users and the public when developing and adopting their rules on patent issues. The two sides have agreed to have further discussion on patent issues related to standards, including in the JCCT IPR Working Group involving participants from all relevant Chinese and U.S. agencies.

Express Delivery

Investigation and Shutdown of Fake EDS Websites

China’s State Postal Bureau (SPB) has initiated communications with, and will continue cooperation with, relevant Chinese government ministries and agencies to investigate and shut down fake express delivery services (EDS) websites established in China.

EDS Supervision

The U.S. and China will strengthen their exchange of ideas in the area of EDS supervision. China’s SPB has agreed on the importance of protecting data security and this is one such area that the two sides will continue to discuss.

Emerging Technologies

3G/Future Technologies (see indigenous innovation section above)

Smart Grid

• With regard to products and technologies related to smart grid, China agreed to ensure that processes for developing standards in China are open and transparent; to provide opportunities for foreign stakeholders to participate in the development of standards, technical regulations and conformity assessment procedures on no less favorable terms than it affords domestic stakeholders; and to base its standards on relevant international standards, consistent with its obligations under the WTO TBT Agreement. China welcomed opportunities to collaborate with the U.S. National Institute of Standards and Technology in developing smart grid standards.

• China committed that all enterprises in China, including state-owned enterprises and state-invested enterprises, will make purchases and sales based solely on commercial considerations. China further committed that it will (a) leave these decisions to commercial considerations between the enterprises, and (b) will provide equal treatment to foreign, foreign-invested, and Chinese domestic enterprises.

Wind Power Equipment

• China confirmed that it will recognize the experience of foreign companies outside China for the purposes of meeting experience requirements to supply equipment for large scale wind power projects.

• China further confirmed that foreign companies may submit documentation based on existing installed wind power projects overseas in order to demonstrate technical requirements for eligibility to supply Chinese large-scale wind power projects.

Agriculture

Beef and Beef Products

The U.S. and China agreed to resume talks on beef market access the week of January 3, 2011.

Avian Influenza

China announced that it has lifted Avian Influenza-related bans on U.S. poultry products from Idaho and Kentucky. The U.S. asked China to take prompt action in accordance with science-based international standards on four remaining state-level bans. Both sides agreed to further technical talks to address issues concerning the remaining four states.

Pharmaceuticals

Regulatory Data Protection

The Chinese side agrees to actively protect undisclosed pharmaceutical data required for marketing approval from unfair commercial use as well as to study the concrete measures for improving implementation thereof, so as to further encourage the innovation of new drugs. China and the U.S. agree to hold a seminar in 2011 in China to continue the discussion of this matter.

Combat Counterfeit Drugs through International Collaboration

China agreed to further combat counterfeit and substandard drugs through international cooperation. The establishment of the SFDA Complaint Center is underway. China and the U.S. agree to work closely to cooperate and conduct information exchange concerning counterfeit drug activities. Both sides shall provide information about cases of counterfeit drugs through the regulatory channel.

Standards and Testing

China confirms it is active in improving its testing and certification process for China’s Compulsory Certification (CCC) mark; China is ready to hold technical exchange with the U.S. to streamline its system.

Telecommunications Goods

China announced it is going to set up a “One-stop-Shopping” mechanism to establish one application for two certification processes for mobile devices. China agreed to initiate exchanges regarding bilateral APECTEL Mutual Recognition Agreement negotiations.

(See Commerce fact sheet for details of planned cooperative activities between the U.S. and China to address some of these issues.)

(See ITT’s Online Archives or 12/14/10 news 10121408 and 10121415, for BP summaries of an International Trade Commission report on China IPR infringement and indigenous innovation policies and Senators calling on China to increase its IPR protection and enforcement in light of this report.)

Commerce press releases, dated 09/15/10, available here and here.